The global impact of coronavirus (COVID-19) could lead to a financial loss for Bahamasair similar to that caused by Hurricane Dorian last year, which resulted in an $8 million shortfall, the airline’s general manager revealed yesterday.
Tracy Cooper said both events, Hurricane Dorian and now the outbreak of COVID-19, are causing the airline to drift away from its strategic plan to reduce its reliance on government subsidization by nearly 50 percent. He said Bahamasair has to throw that plan out the window for this fiscal year.
“Our aim is to make sure the government is only providing to Bahamasair what it should be providing and we are moving in that direction. Obviously, Dorian and now COVID-19 are having an effect on that. Dorian, when you take into consideration Freeport and Abaco, they account for roughly about 30 percent of our business and when you drop out 30 percent of your business it is a sizable jump,” Cooper told Guardian Business yesterday.
“So, we had somewhere around an $8 million effect between the last week in August and going into December. So, Dorian did do kind of a number on Bahamasair and we are recovering from that. Obviously this COVID-19 is seeming like it’s going to do a similar thing. So, this fiscal year we’re almost going to have to throw out the window and just start back over in the new fiscal year. So, we are now starting to replan and hopefully we won’t have to worry about these activities anymore.”
The airline’s Chairman Tommy Turnquest echoed those same concerns and said it’s still too early to determine how much of a hit the airline will suffer.
“We are already supported to the tune of $20 million-plus by the government of The Bahamas. We had hoped pre-Hurricane Dorian that we would be able to reduce that. We have our strategic plan that we are working on, that we think would begin to reduce some of that exposure,” he said.
“Along comes COVID-19. Obviously, that’s going to put another dent into our revenue streams and what we do. So we’re going to look at the cost side of it and be as humane as we can in terms of moving forward. But again, it’s still very early to determine.”
Bahamasair’s aim is to reduce its subsidy from government to around $9 million.
“We figure that’s a good benchmark of which to say that the transportation aspect of it is costing us. And so, we are trying to remove ourselves hopefully by another $10 million,” Cooper said.
That transportation aspect refers to the airline’s requirement by the government to provide transportation to far-flung Family Islands.
“Obviously Bahamasair flies some routes that the government wants as a transportation system. When you’re going down to Mayaguana and to Crooked Island and Acklins and a few of the other locations, these are islands that may have 400 to 600 people on them and cannot have a sustained travel load or load factors for the aircraft to sustain itself comfortably,” he said.
“So, what we do is we take into consideration what those adjustments are and then we work backwards from that.”